Mission Resources Announces $71 MM Capital Budget for 2005

The Board of Directors of Mission Resources Corporation (Nasdaq:MSSN) has approved a capital expenditure budget of $71 million for 2005 compared with an estimated 2004 capital expenditure budget of approximately $55 million. This 30% increase in the 2005 capital expenditure budget is expected to be funded with discretionary cash flow.

Approximately 45% of the 2005 capital budget is allocated to the Gulf Coast Onshore area, 20% to the Gulf of Mexico area, 17% to the Permian Basin area and 18% to land, seismic and other items. The exploration portion of capital spending will increase in 2005 to approximately 28% of the total budget. Mission does not budget for acquisitions.

"With continued strong commodity prices and our experienced geoscience teams, we are excited about expanding the exploration portion of our capital spending," said Robert L. Cavnar, Mission's chairman, president and chief executive officer. "Our goal in 2005 is to increase production approximately 10% while maintaining our current expense levels. We'll also continue to aggressively pursue potential acquisition targets."

2005 Guidance -- Guidance for full year 2005 is as follows:

                                                  Full Year 2005
----------------------------------------------------------------------

----------------------------------------------------------------------
Estimated Daily Production                        Daily Average
----------------------------------------------------------------------
Crude Oil (Barrels)                               4,500 - 4,800
----------------------------------------------------------------------
Natural Gas (Mmcf)                                43 - 48
----------------------------------------------------------------------
Total (Mmcfe)                                     71 - 76
----------------------------------------------------------------------


Operating expenses                                Per Mcfe
----------------------------------------------------------------------
Lease operating expense                           $1.18 - $1.28
----------------------------------------------------------------------
Taxes other than income                           $0.40 - $0.45
----------------------------------------------------------------------
Depreciation, depletion and amortization          $1.75 - $1.85
----------------------------------------------------------------------
General and administrative                        $0.50 - $0.55
----------------------------------------------------------------------
Cash Interest Expense (1)                         $15 - $17 million
----------------------------------------------------------------------
Income Tax Rate                                   36.5%, 1.5% current
----------------------------------------------------------------------


Adjusted EBITDA                                   $92 million (2)
----------------------------------------------------------------------
Discretionary Cash Flow                           $76 million (2)
----------------------------------------------------------------------

(1) Excludes non-cash interest expense of approximately $1.5 million
    for the full year 2005.

(2) Adjusted EBITDA and Discretionary Cash Flow guidance is based on
    the following assumptions for the full year of 2005 (i) $38.00 per
    barrel/$5.75 per Mcf NYMEX prices for the year of 2005 with an oil
    differential of ($1.29) per barrel and a gas differential of
    ($0.03) per Mcf and (ii) mid-point of guidance for all production
    and expense numbers. (See the attached schedule for a
    reconciliation of net income to adjusted EBITDA and of net cash
    provided by operating activities to discretionary cash flow.)
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Brent Crude Oil : $51.33/BBL 1.14%
Light Crude Oil : $48.37/BBL 1.34%
Natural Gas : $3.1/MMBtu 1.63%
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